CTA Case No. 2883 (Decision)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY PEOCTER & GAMBLE PHILIPPINE MANUFACTURING CORPORATION, Peti tione~r, - - ve~ r sus~ C.T.A. CASE NO. 2883 THE COMMISSIONER OF INTERNAL / 3// ;/ REVENUE, Respondent . X- - - - - - - - - - - - - X DE C I S I 0 N This is an action to enforce a claim for a refund or tax credit of an amount of jji4,83:2,989 . 00 represent- ing an alleged overpaid withholding tax on dividends petitioner remitted to its parent company, Proc:ter & Gamble Co ., u.s.A. On April 1 and November 20 , 1975, petitioner dome�stic c:orpor.ation, a wholly owned subs:idiar.y of Procter & Gamble Co., u.s.A., declared and remitted to the latter, dividends amounting to jjil7 , 707,460.65 and jji6,4:57,485.6>S, r.espectively, or a total of jji24,,164i,946.30, .. on which petitioner withheld and paid to the government the amounts of jji6,197 ,611.23 and jji2,260,119.98 or a total of jji8,457,7 ll .21 as 35% withholdin~ tax. Peti- tioner, however, claims that pursuant to Section 24(b) (1) of the~ National Inte-rnal Revenue Code, as amended by Presidential Decree No. 36.9, taken in relation with the provision of Section 902 of th�e u.s. Internal Revenue

. '/ DECISION - CTA CASE NO. 2883 - 2- Code, the rates appiicable for the divi dend remit- tances should only be 15% ins.tead of 35%. As thus an overpaymen t of an amo unt of P4,832,989.00 (20% of ij~24,164, ,946 . 30) '� now sought in a claim for a refund or tax credit dated January 5, 1977 which has remaine d unacted by the respondent Commissioner of Internal Revenue. Hence , the present petition filed on July I3, 1977 . Section 24(b) ll) ?f the National Internal Revenue Code, as amended by P.D. 369, which allows a prefe- rential tax of 15% on dividend's received from a domestic corporation by a non-resident foreign corporation, pro- vides in pertinent part: "x x: x: on dividends received from a domestic c orporation liable to tax under this chapter the tax: shall be 15% of the dividends: rece,ive:d, which shall be co llec:ted and p a id as provided in Section 53(d) of this Code subject to the condition th~t the country in which the non-resident foreign corporation is domiciled shall allow a cre- dit against the tax due from the nonresident for~n cor por.ation, taxes deemed to have _2een paid in the Philippines equivalent to 20% which .repr.esents the difference between 't'h'e re'gular tax: (35%) on corporations and the t ax: (15%) on divi~ends as provided in this section . � x: x: x:"(Emphasis supplied) Section 902 of the u.s. Internal Revenue ~ode, as amended by Public Law 87-834, the law governing tax cre:dits granted to u.s. c orporations on dividends re- c:eived from foreign corporations to the extent appli- cable reads: 22

DECISION - CTA CASE NO . 2883 - 3- " SECTION 902 . CREDIT FOR CORPORATE STOCKHOLDER IN FOREIGN CORPORATION (a) Treatment of Taxes Paid by For~ign Corporation .- . For purposes of this subject, a domestic corporation which owns at least 10 pe~r. cent of the vo ti ng stock of a foreign corporation from which it receives dividends in any t axable� year shall - (1) to the~ exte�nt such dividends are paid by iuch foreign corporation out of accumulated prof its . [as defined in subsection (c) (1) (Al7 of a ye~ar fo r which such foreign corporation is not a less developed country corporation, be deemed to have paid the same proportion of any income , war profits, or excess profits taxes paid or deemed to be pa id by such foreign corporation to any foreig.n country or to any possession of the United States on or with respect to such accumulated profits, which the amount of such dividends (determined without regard to Section 78) bears to the amount of such accumulated profits in e�xc:ess of such income, war profits , and ex.cess p ro fits taxe~s: (other than those deemed paid) i. and (2) to the extent such dividends are paid by iuch foreign corporation out of accumulat~;d profits [as defined in subsection (c) (1) (Bl/ of a year for which such foreign corporation is a less:-de:ve�loped country corpo- ration, be deemed to have paid the same pr o- portion of any income, war profi ts, or e�x.cess profits t axes paid or deemed to be~ paid by such foreign corporation to any foreign country or to any possession of the~ United States on or with respect to such accumulated profits , which the� amount of such dividends be~ar. s to the amou nt of such accumulated pro- fits . XXX XXX x.xx (c) Applicable Rules ( 1) Acc:umulate~d prbfits de~fined.- For purposes .of this section, the term ' accumu- � l ate�d pr.ofits' means wi th respect to any foreign corporation - J

DECISION - CTA CASE NO . 2883 - .4: - (A ) for purposes of subsections (a ) (1 ) a~d (b) (1) , the amount of its gains, . �pr ofits.,� oi income computed with- out reduction by t he amount of the income , war p r of i ts , and e:xcess profits t axes imposed on or: with respect to such pro- fits or income by any forei9n country. x x x; and (B) fo r purposes of subsections (a) (2) a~d (b) (2) , t he amount of its gai~s , �profits,� oi income in e:xcess of the: i ncome�, war profits , and e:xce:ss pro- fits taxes i mposed on or with respect to such pr ofits or income. The Secretary or his delegate shall have fu l l power to determine from the accumulated profits of what year or years such d i vidends were paid ,, treating divi- dends paid in the first 60 days of any year as having been paid from the accumu- l ated prof its of the preceding ye:a.r or years (unless to his satisfact i on shows othe rwise) , and in other respects treating dividends ~s having been paid from the mos t recently ac:c:umulate:d gains , profits, or e:arnings. XXX xxx.� " Petitioner contends that under Section ~2 of the u.s. Internal Revenue Code , supra, its parent corpo- ration is allowed t o a tax cre:dit equivalent to at least 20%: of tax.es deeme:d paid in the Philippines on d iv idends re�ceive-d as thus illustr.ated in tactile d e:t a i l s : The U.S . n deeme:d paid .. tax credit allowed petitioner 's parent company on d i vidends paid to it. by petitioner in a year in which it is not a less developed corporation c an be: determined by the following formula: ' 24

DECISION - CTA CASE NO . 288l - 5- Phil . income t ax Dividend s U. S . de�emed paid on accumulated Accumulated pa id credi t profits (gains, pro- X profits in = (Foreign tax fits, income without excess� of under Sec. reduction by Phil . Phil . income u.s. 902 (a) (1) of income tax) t ax the Int. Rev. Code The formula for computing the u.s. "deemed paid" tax c redit allowed Procter & Gamble Company on dividends paid to it by petitioner ou t of accumulated profits in a year i n ' whic h petitioner is a less developed count r y corpo- ~2~ is as fo llows : Phil . income t a x Dividends u.s . deemed paid on accumulated Accumula ted profits (gains , pro- profits paid tax fits, inc ome in ex- X cess of Phil . income = credit (foreign tax tax credit under Sec . u.s. 902 (a) ( 2) of the inter- nal Revenue Code) To arrive at the Philippine Income Tax paid on accumulated profits (ga ins, profits, income i n excess of Philippine: Income Tax) '� we compute : Philippine Accumulated profits Ph il . income = tax paid on Income tax X (gains , profits , income less Phil . accumulated pro- income tax ) g ain s, fits (gains , profits, i ncome profits, i ncome in exces s of Phil . Income Tax) In t he second quarter of t he calendar year 1975, petitioner declared and remitte d in favor of its parent company in the United States d ividends amoun ting to ~17,707 , 460 . 65 on which it paid withhold ing tax in t hE� c'TI!O Unt of P6 ,197 , 611.23 . Pursuan t to Section 902(a) of u.s. I nte r n al Revenue Code , su~, these dividends ar e deemed to have been paid out of petit i oner's mo st recently accumulated profits, namely, its profit$ for the fiscal year ended J une 30, 197 4 . For the said fi scal year , petitioner had taxable n et income of ~56 , 500 , 3 32 on which i t paid income t ax amounting to ~19 , 765 ,1 16. 25 J

DECISION - CTA CASE NO. 288l - 6. - If petitioner is not considere~d a less-de~veloped corporation for its fi"S'Cal year ended J une 30 , 1974 , the tax credi t allowed Procter & Gamble Company , i ts parent company , in the Uni ted States amounts t o ~9 , 527 ,370 . 52 arrived at as follows : Gains , p r of i ts, and i ncome of petitionex: � � ~56 ,5 0 0 , 352 . 00 Philippine Income Tax imposed on or with re spect to gains, profits, and i ncome (Total Philipp i ne Income Tax) �� � � 1 9 , 765 ,1 16,00 Accumulated profits (ga i ns , profits, . . . and income without reduct ion by � 56,500 , 352.00 Philippine Income Tax ����� Dividends paid to U.S. parent c ompany ��� 1 7,707 , 460 . 65 Accumulated profits in excess of . . . . . Philippine Income Tax � 36,7 35 ,216 . 00 (f:il 56,, 500,332 l ess ~19 ,76 5,116) .� Philippine I ncome Dividends u.s . deemed paid Tax paid on X Accumulated = t a x credit (foreign profits in tax c redi t under accumulated profits excess of Sec. 902 (a) (1) of Philippine U ~ S . Internal Revenue income tax Code ) fill9,765,116 X Pl 7 ,707 , 460.65 = ~9 , 527 , 370.52 36 , 735,, 216 The u.s. " deemed pa i d" tax credit of lii9 ,527 , 370 . 52 i s clearly more than 20% of the d i vidends remitted by pet i tioner to it s parent company amounting to ~17 ,707 , 460 .65. As a matter of fact, it amount s t o almost 5 4% of such dividends . Obv iously, t he 20% requ i rement under Section 24(b ) (1) ?f the Tax Code is c omp l ied with. On the other hand, the u. s . tax c red it a llowed the par ent company if petitioner is deemed a less- developed C"ou nt ry corpo ration for its fisc al year e nded June 3 0 , 1974 amounts to fil6 , 194 , 478 . 21, C'Omput ed as follm-.'s : Gains , profits , and income of petit ioner � � f:il56 ,500 , 3 22. 0 0 Philippine Income Tax imposed on or 0 � � 19 ,765 ,116 . 00 with r espect to gains , pr of i ts , and i nC"ome (Total Philippi ne Income Tax) 26

DECISION - - 7- CTA CASE NO . 2881 ,. Dividends paid to u.s . parent company � � Pl7 , 707,460 . 65 Philippine Accumulated pr ofits Ph i l ippine I nc ome Income Tax X Gains, profits, and = Tax Paid on accu- income mulated pr of i ts . Ell9,76i5 , 116 X 3.6, 7 3.5, 216 = Ell 2 , 850 , 8 25 � 9 7 S.6 , S.00 , 32 2 Philippine Income Dividends u.s. deemed paid Tax Paid on Accu- mulated profits X Acc:umu la ted = tax c r ed it (Foreign Prof i ts tax credi t unde r Sec. 902(a) (2) of the u. s . I nterna l Revenue Code) Ell2 , 85i0 , 82S..97 X Ell7,707,460.65 El6 , 194,478 . 21 16,, 73:5,216 Th e amount of El6 , 194,478 is about 35% of the divide~nds amo un t ing to Ell7 ,7 07 , 4,60.65 remi tte d by petitioner td its paren t company . He nce , t he u. s . "de:emed paid " t ax c r ed i t is equiva l ent t o at l east 20% of the t axes de�emed paid on s uch d iv ide nd s i n the Phil i ppines. �. The dividends declared and remitted by peti- t ioner in favor of i t s parent company in the second quarte:.r of the: c:alenda r year 1 975 amoun t ed to El l 7 , 70 7 , 460 . 65 on which petit i oner wi thheld taxes at t he ra te of 35% in the: sum of El6.,1 97 , 6ll. 23 . Twenty (20 %) of such divide:nd which r ep r esents th e d iffer e nce b ~tween the l5% tax paid (P6 , 1 97,611 . 23) and the preferential rate of 15% (P2 , 6.56 , l l9 . 10) amounts to P3 , 541 . 492.13 . On the other hand , petitioner' s parent c ompan y is entitled to "deemed pa id" tax cred it i n the United States of El9,527 , 370 ~ 52 or about 54% o f such dividends if petitioner i s not considered a l ess- de�veloped country corporation , or a t ax credit of P6,194 , 478 . 21 or about 35% of such div i dends i f petitioner is a les:s-de�veloped country corporation for its fiscal year ended June 3:0 , 1974 . Clearly , the United States allows petitioner ' s paren t company a tax credit or more t han 20% of taxes de�emed paid in the Philippines on s uch dividends . Thus , the: preferen t ial 1 5% tax r ate should be t he applicable Ph i lippine tax on such dividends . 27

DECISION - CTA CASE NO ~ 2883 � - 8- In the fourth quarter of the calendar year 1975, petitioner declared and remitted in faber of its parent company in the United States d i vidend s amounti ng to ~6 , 457,485 . 65 on which i t paid withholding t a x in the amount of ~2 , 260 , 119.98 . These dividends are deemed to have been paid out of petitioner ' ~ most rece~ntly accumu l ated profits , namely, i ts prof i t s for the fiscal year ended June 30 , 1975 (See Sec tion 902(c) o f U.S. Internal Revenue Code, supra .) For the safd year , pet i tioner had a t axable net i ricome of ~8,738 , 125 on which i t paid ~ 2, 952 , 159 (actual ly ~2 , 988,00 1 but ii35,842 was. refundable/ creditab l e as overpayment) �. If petitioner is not a less developed country c:orpora tion for i ts. fis:c.il ye~ar e�nde:d June 30 , 1975 , the tax. credit a.llowe'<l Procter & Gambl e, its parent company, in the United States amounts to ~3,294 , 786.80 , ar r ived at as follows : Gains, profits., anddncome of pe:titione:r � � ii8 ,7 38 , 125 Philippine Income Tax imposed on or with respect to gains, p r o fi ts , and income (Total Phil . Income Tax) .� � �������� 2 , 952;153 Accumulated prof' its (Gains , profits , and income without reduction by Philippine Income Tax) � ���� � ���������� � � 8 , 738 ,125 Accumula te:d p:-of i t s in e:xcess of Philippine Income Tax (P2 , 738 , 125 - _ii2 , 952 ,1 59) . ����� � �� � � �� ��� 5 , 785 , 966 ... Di vidends paid to u.s . parent company 6 , 457 ,4.85 . 65 PHILIPPINE INCOME DIVIDENDS U. S . DEEMED PAID TAX PAID ON ACCUMU- X TAX CREDIT (For- LATED PROFITS ACCUMULATED = eign tax credit PROFITS IN under Section 902 (a) (2) of the U. S . EXCESS OF I nt: R~venu e Co de) PHILIPPINE INCOME TAX ii2 , 952 , 159 X ii6 , 457,485.65_ ii3 , 294 , 786 . 80 5 , 785 , 966 Obviously , the u. s . "deemed paid" tax cred i t of ii3 , 294 , 786. 80 is more than iil , 291 ,497 . 13 or 2 0 % of the� dividends amounting to ii6 , 4:57 , 485 . 6S remitted by petitioner to its parent company in the United States. As a matter of fact , it amounts

DECISION - CTA CASE NO . 2883 -� '9 - to about 51% of such dividends . Hence, the 20% requirement under Se:ction 24(b) (1) of the Tax Code is thus easily met . � � On the dther hand, the u.s. tax credit allowed the p are nt company if petitioner is deemed a less-developed country corporation for its fiscal year ended June 3:0, 1975 amounts to ~1,954,777.67, computed as follows: Gains, profits, and income� of pet.itioner �� P8 ,738,125 Philippine: Income Tax imposed on or 2,952,159 with respect to gains, profits , and income (Total Philippine Income Tax) Accumulated profits {Gains, profits, and inc:ome in excess of Philippine Income Tax) ������������������������������ 5,785 ,966 ..... Dividends: paid to u.s. parent company 6,4:57 , 485.65 PHILIPPINE X ACCUMULATED PROFITS = PHILIPPINE INCOME INCOME T.AX GAINS, BROFITS, AND TAX PAID ON ACCU- INCOME MULATED PROFITS ii2, 952,159 X P5 , 785,966 = Pl,954 ,777.67 8, 738,125 PHILIPPINE INCOME ACCUHULATED PROFITS U.S. DEEMED TAX PAID ON ACCU- X GAINS, PROFITS, AND = PAID TAX CREDIT MULATED PROFITS +NCOME {Foreign tax c:redi t under Sec. 90 2 {a) { 2) of the u.s. �In~ ternal Rev. Code ) ~ 1 , 954 , 7 7 7 � 67 X ii6,457,486.65 = P2,181,649 .31 5, 785,966 The amount of P2,181,649 . 31 is about 34% of the dividends amounting to P6,457,495.65 remi tted by petitioner in favor of its u.s. p,arent compan y . Clear.ly, the U. S . "deemed paid" tax credit is more .. than 20% of the taxes deemed paid in the Philippines on such dividends. Pet'itione:r decl a red. and remitted to its parent c:ompany in the fourth quar te:r of the calendar ye�ar 1975 divide:nds amounting to P6 ,457 , 485.6.S on which pe:ti tioner withhe�ld taxes at the� rate of 35% in

DECISION - CTA CASE NO. 2883 - 10 - the amount of P2,26>0,119.98. Twenty per cent (20%) of such d ividends, which re:presents the diffe:I:.ence betwe�en the' l5% tax paid (P2,260,119.98) and the preferential rate of 15% (P968,622.85) amounts to Pl,291,497.13. Petitioner 's. parent compa ny is allowed a "de:emed paid" tax credit in the Unite~d State�s of Pl,294,786. 8 0 or about 51% of such dividends if pe:ti tio ner is ~ a le:ss deve�loped c_ountry corporation for its fiscal year ended June 30, 1975, or a tax credit of Pl, 954,,777.67 or aboL.t 34% of s uch dividends if petitioner is consi- dered a les. s- deve� l op e~d country corporation in t he: sa id year. Obviously, the United States allows peti- tioner'� parent company a tax credit of more than 20% of taxe s dee:med paid in the Philippines on such dividends. Hence, the Philippine with- holding tax rate i mposab1e is 15%, not 35%. Respondent ave rs that the petitioner failed to meet certain conditions ne:ce�s s ary in order that the dividends received by the nonresident parent company in the United Sta tes be subject to the preferential 15% tax instead of 35%, thus - Under u.s. law, the amount of foreign tax p aid for which the U.S. taxpayer Pr:octe�r & Gamb le, U.s .A. is entitled to credit, depends upon the proportion which the amount of dividends r eceived bears to the accumu- lated profits of Procter & Gamble, Philippines with I:e:spect t o which tax: was paid. The pr i- vilege of tax credit is not automatically � available because only a proportionate part of the income tax paid by Procter & Gamble Philippines to the Philippine Government is credited agai nst the income tax: due to t he Unite�d States government upon dividends re- ceived fr om Pr octe:r � & Gamb l e Philippines. In other words, the foreign tax creditable under u.s. law should be' at least 20% of the taxe�s deemed paid in the Philippines following this formula, assuming that the Philippines is categorized a less deve�loped country: 30

DECISION - CTA CASE NO. 2883 - 11 - Philippine Income Tax X Di v ide:nds: = Tax Cre- Accumul c. ted ditable Profits�. Consequen tly, petitioner should pr ove: 1 ) The Ph ilippine Income Tax: 2) Dividends p a fd to Pr octer & Gamb le u.s.A.: j ) Accumu- late'd profits as of the end of fis:.cal ye ar s ending 30 June 1974 an d 1975: 4) ~he amount actually credited against the income ta~ due in the U.s . Petitioner, however , adduced evidence only with respect to the Philippine income tax payments and dividend p ayment s made. No evi- de�nce was presented to show the actual ' amoun t credited by the u . s . government against the income tax due Pr octer & Gamble, U.S .A . Neither did petitioner prove� the accumulated profits as of the end of fiscal years 1974 and 1975. Petitioner did not collafe t he accumulated profits but projected on the net income for the fiscal year ended June 30, 1974 in the amount of P5G,500,332.00 as divisor in ascer- taining the' u.s. dee,med paid tax credit. And further , that t he refund sought wou ld negate t he intendlne:nt of PD No . 369 because t he amount of P4,8l2,989.00 or its equivalent in do lla r will be declared as income of the recipient foreign investor and ultimately s ubjected to income tax by the u.s. government. Hence the u . s. government will benefii from the law supposed to be in- tended for the foreign investor . And, such is not the philosophy of the Decree to subsidize f oreign government through tax. sparing syste�m. The r:e:cord raises the issue as to whether the peti- tioner is entitled to the preferential 15% tax rate on dividends declared and remitted to its parent foreign cor:poration. 31

.� DECISION - CTA CASE NO. 2883 - 12 - It se:ems to be in plac:e to state that to a c:ertain extent the di verging diale:ctics in almost every aspect of the exeJCcise are no less diffe�r:ent than they mig.ht seem, being more of me�thod and emphas is than substance . It might be, and indeed, we think it should be that under Section 902 of the u.s. Internal Revenue Code , supra, petitioner's parent corporation is entitled td a tax. credit equivalent to at le:ast 20% of the taxes deemed to have been paid in the Philippines on dividends remit- ted to i t by petitioner. Such being the case petitioner , commends itself to this Court that it should be: subject to only 15% and not the 35% tax rate on dividends paid to it s non - resident parent company in the: United States pursuant to Section 24(b) (1) ?f the Tax Code, supra. Ii i s urged upon us by the respondent that peti- tioner failed to show the actual amount credited by the u.s. gov ernment aga inst the income tax due Procter & Gamble, u . s.A. on the d i vidends received. Likewise, petitioner failed to present the income tax return of Procte r & Gamble, U.S . A. for 1975 when the dividends were re:ce�ived nor any duly authent icated document showing that the u. s. government credited the 20 % tax _deemed paid in the Phil ipp ines. Let it suffice, however, that Section 24(b) (1) ?f the Tax Code does not require that an actual tax credit be grante�d but merely requires that- the "country in which the non-resident foreign cor poration 32

DECISION - CTA CASE NO. 2883 - 13 - is domiciled shall allow a credit against the tax due from the non-resident foreign corporation, taxes deemed to have been paid in the Philippines." As aptly noted, the law refers to a"deemed paid" tax credit of 20% which set the quibble at rest. We likewise find illogic the impression prec ipitately broached by the~ re�spondent that the grant of refund would be violative of the purpose of PD No. 369 since the reci- pient parent corpo ration will be taxed by the u. s . govern- ment anyway. The records, howe:ve�r, does not show that the u. s . gover.nment wi ll tax such refunded amount; but even on the assumption tha t it will, there is no require- ment nor condition in Section 24:(b) (1) .of the Tax Code that the country of domicile (United States) .should not tax th~ recipient of the dividends on the amount repre- senting the difference between the 35% and 15% prefe- rential tax rate. In adding up to a logical reasoning petitioner puts is upon the simple proposition that, "Mo reover, the intention of the l aw would still be served even i f the recipient were taxed on the refund stnce it would still be benefited to the extent of that portion in excess of the tax paid on the refunded amount. What is important i s that the re�cipient receives a tax benefit since the purpose of the law is to encourage recipient to bring more capital investment." Just so and aptly enough we share such view. 33

DECISION - CTA CASE NO. 2883 - 14 - We therefor e reach a conclusion no different from the� November 15, 1976. ruling of the respondent Commiss ioner himself c onceding to th e herein pe ti- tioner a preferential rate of a l S% withholding tax at source, quoted in part: "Considering t hat under Sect i ons 901 and 902 of t he u.s. I nte rnal Revenue Code, the u. s . parent company will be entitled to a tax credit equivalent to at l east 20% of the taxes deemed to have bee n paid in the Philippines, in addition to the 15% withholding t ax , on the said inter-company dividend the condi t ions provided in t he above-cited Section is ( sic) fulfilled. (BIR Ruling No . 7 6- 004 1 July .19 1 1976..} . "Accordingly, Procter & Gamble Phil ip- . pine .Manufacturing Corporation, as withholding agent, may wi thhold 15% on ly on the dividend declared and remitted to its parent c ompany , Procter & Gamble Company, U.S. A." Far be it from a theoretical gobbledygook t he ruling. lends se�tt ling e l oque nce to the precise issue in the case at bar. We see no reason for respondent ' s quick shuttl e of a posture by no l onger holding the same as. his "cup of tea " , so to s:peak. We do not read ily uproo t a� ruling for specul ative p ur p ose or simply to gratify idle curiosity . Accordingly , petitioner is entitled to the sought refund or tax cr ed it of the amount representing the overpaid withholding tax at source and the paymen t 34

,' ' DECISION - CTA CASE NO . 2883 - 15 - therefor by the re spondent hereby ordered. No c o s.t s . SO ORDERED. Quezon City, Metro Manila, January 31, 1984. WE CONCUR: ~~' $~' CONSTANTE C ROAQUIN {Associat Judge �